Posts Tagged ‘Technology’

The diseases of the poor constitute an immense amount of human suffering (see our recent post on George Bush meets the Guinea worm). And they are an immense economic burden as well — both for the poor and for poor economies (which will grow faster with a healthier workforce).

Privately funded pharmaceutical research responds to incentives: and the diseases of the wealthy world supply the biggest bucks. Not enough R&D is put into the diseases of poverty. So it is to the wealthy world that the drugs are supplied. Market failure has a deadly effect. Ill-health drives people into chronic poverty and traps them there — too often until a premature and painful death.

So we are impressed by the hard thinking that has gone into The Health Impact Fund: Making New Medicines Accessible to All a new report from Incentives for Global Health. Go here to download the entire report or listen to one of the report’s lead authors, philosopher Thomas Pogge, talk about the proposal at Public Ethics Radio.

So, what’s the new idea? In brief, the proposed Health Impact Fund (HIF) seeks to correct market failure by rewarding any new medicine, if priced at cost, on the basis of its impact on global health. Any pharmaceutical company can opt to register its product with the HIF. The firm must then sell its drug at an administered price near the average cost of its production and distribution. This price applies worldwide. What does the company get compared with exercising its usual patent rights and selling at a higher price? It gets a stream of payments from the HIF based on the assessed global health impact of its drug.

“We’re not asking for corporations to give their products away … If it is used correctly, the fund would reward those drugs that have the most impact on the world and companies should earn the same amount of money as they would if they didn’t take part.”

The advantage of the scheme is that it uses the market to work for poor people and those who help them — the drugs get developed and distributed at a low cost.